‘Negative forces’ prompt Lincoln hospital to cut 10 positions

Penobscot Valley Hospital of Lincoln as seen on Friday, Nov. 28, 2014.

LINCOLN, Maine — Penobscot Valley Hospital will cut 10 full-time positions in the next two weeks due to the 25-bed hospital sustaining $1.2 million in operating losses since 2012, hospital officials said.

Hospital CEO Gary Poquette said other negative factors contributed to the hospital’s need to trim its 210-member staff: A declining population in the Lincoln region, the state’s failure to expand Medicaid coverage, a reduction from 100 percent to 65 percent in federal payments of Medicare bad debts, and an increase in the number of high-deductible health insurance plans.

The loss of an estimated 937 jobs from the closing of the Lincoln and Old Town paper mills late last year is another factor, he said. A study by Camoin Associates of New York listed 195 and 179 jobs directly lost from the Old Town and Lincoln mills and 563 jobs lost indirectly in Hancock, Penobscot, Piscataquis and Waldo counties due to the shutdowns. Eastern Maine Development Corp. commissioned the Camoin Associates study to determine the impacts of the mill closures. It was released by EMDC in September.

“It is kind of a building scenario of negative forces. It started three or four years ago, and the other factors just compounded it,” Poquette said Thursday. “Every small, rural, critical-access hospital is facing this.”

The $1.2 million in operating losses occurred in the fiscal years 2012 to 2014, Poquette said. The figures for last year are not yet available. Of the state’s 37 hospitals, 18 operated at a loss in 2014, 21 in 2013 and 20 in 2012.

Cuts to MaineCare and the state opting to not expand Medicaid have created about $326 million in revenue losses to Maine hospitals, officials said.

Meanwhile, Penobscot Valley Hospital, which serves Lincoln and 14 other Penobscot County towns, has suffered a drop in inpatient admissions, from 1,102 in 2013 to 929 in 2015. The hospital had 975 admissions in 2014, said Kristie Libby, the hospital’s director of marketing and development.

Hospital chief financial officer Ann Marie Rush said the layoffs or attrition cuts “would be something that has to happen immediately. If somebody plans on leaving at the end of the year, that wouldn’t be counted towards the goal.”

Hospital officials began informing the staff, which includes 180 full-time workers, of the layoffs last week. The positions to be cut have not been identified, Rush said.

The hospital has instituted temporary hiring and capital purchase freezes as well as limits on travel and educational opportunities for employees as part of a facility-wide remediation plan and yearlong review of services, Poquette said.

Hospital officials have also developed a strategic plan with the Lincoln Lakes region’s other large medical provider, Health Access Network of Lincoln, to help both continue to survive.

Poquette complimented Lincoln officials for their work developing the town’s economy but said that other area towns must work together doing the same thing if the economic and population losses that forced the hospital’s layoffs are to be reversed.

“I think they might try to get together as a group with an agency that does economic development and set some expectations,” Poquette said.